At the beginning of the current week, Turkey’s import scrap market was still under pressure with the same buyers in the market and the rest monitoring the situation. Despite increasing domestic rebar prices, Turkish mills were still successfully pushing down their deep sea scrap prices. Two ex-EU scrap bookings to Turkey surfaced in the market on September 25, confirming the new price levels. While some market sources believed the new levels could represent a bottom for the market, others were not so sure and reported that the sentiment in the EU market had become more negative. The industrial slowdown in the EU is impacting scrap demand, giving buyers leverage over prices. With the low interest observed in Turkey in deep sea scrap, there seems to be little support for local European scrap prices. Collection prices in the EU are at €280-285/mt DAP Amsterdam, market sources report.
Meanwhile two ex-US scrap bookings were done by Marmara-based and Izmir-based producers, both with HMS I/II 80:20 scrap prices standing at $368/mt CFR. This level is only $0.5/mt higher than the previous ex-US reference price reported by SteelOrbis. The Izmir-based producer concluded its deal for shipment in November, market sources report.
Under the current conditions, the deep sea benchmark HMS I/II 80:20 scrap prices in CFR terms have moved up by 0.27 percent week on week. The prices are now 1.21 percent lower month on month in the deep sea segment, with prices being in the range of $366-370/mt CFR.
Predictions for US ferrous scrap pricing for the month of October are now considered to be mixed, with those expecting a dockworker strike at US East Coast and Gulf Coast port facilities on October 1 pointing to weak sideways settled prices, versus September scrap values, while those who think the strike may be averted call for October to settle sideways to strong sideways as export demand for containerized steel scrap will likely remain reasonably strong, market insiders told SteelOrbis this week.
SteelOrbis has learned that the current price for Mexican domestic shredded scrap has decreased by 7.1 percent over the past week to MXN 6,500/mt ($323/mt).
Additionally, HMS I/II scrap prices have remained stable over the same period at MXN 5,350/mt ($266/mt).
The local German scrap market has not yet recovered from the holiday season and demand is still slow both from the local and export markets. Over the month of September, scrap flow has been on the low side, but currently it is increasing, exerting downward pressure on prices. This sluggish situation is mainly due to a general slowdown in production, especially in the automotive sector. Volkswagen, for example, is planning to close two of its plants and it seems one major German stainless steel producer is getting ready to close its furnaces.
Currently, local market prices for shredded scrap are at €300/mt ex-works, and HMS I/II or E1 is at around €290/mt ex-works. According to sources, prices in the Netherlands have moved down from the last level reported, going from €295-297/mt CIF Amsterdam to €280-285/mt CIF Amsterdam.
According to the latest data provided by the Bundesvereinigung Deutscher Stahlrecycling-und Entsorgungsunternehmen e.V, in the first 20 days of September, scrap prices in Germany moved down by €24.7-34.7/mt month on month.
Local scrap prices in Italy have remained unchanged this week as has the general market situation: supply is scarce though it is more than enough to cover producers' needs.
According to sources, the balance of the local Italian scrap market is very precarious and may alter in the coming weeks. In fact, some Italian steel mills have already slowed down or stopped production and others plan to do so shortly. This will lead to a sharp drop in demand for scrap from steel mills and the intention of producers is to lower scrap purchase prices. According to one market participant, producers will also try to lower import scrap prices from France, Austria and Germany to the same level as Italian prices. This would entail a drop of €20-50/mt, which, according to some, will not be accepted by the sellers. Furthermore, scrap prices find little support internationally given the recent declines in deep sea scrap prices from Europe, which now stand at $357-361/mt CFR Turkey. According to market participants, increases in ex-China prices following the stimulus policies announced by the Chinese government this week also do not seem to be having much impact on the Italian and European markets.
Leading Japanese EAF-based steel producer Tokyo Steel has continued to cut its domestic scrap purchase prices, with its latest cut being the ninth one announced this month. Tokyo Steel’s general range for H2 grade scrap has declined by JPY 500-1,000/mt to JPY 38,500-40,500/mt ($267-284/mt) depending on the mill.
Vietnam’s import scrap prices have remained soft over the past week. Some Vietnamese producers are showing interest in scrap given the low prices levels, but there are still few purchases. Offers for Japanese H2 scrap to Vietnam have moved down by another $10/mt over the past week to $335-340/mt CFR. Ex-US bulk HMS I/II 80:20 scrap offer prices are still at $355-360/mt CFR Vietnam.
Taiwan’s import scrap market has continued to move down in the current week due to the sluggish performance of the domestic finished steel segment. A market source has referred to the domestic rebar market as “a complete flameout as the market is still waiting for China to cool down.” While offers for ex-US HMS I/II (80:20) scrap in containers have declined by $5-7/mt over the past week to $310-315/mt CFR, a few deals have been concluded by Taiwanese producers at $305/mt CFR this week. Offers for Japanese H1/2 (50:50) scrap bulk have declined from the $319-327/mt CFR range to $315-320/mt CFR.
South Korean producers are showing little interest for Japanese scrap, except of POSCO which shares bids from time to time to procure the scrap grades it needs and fails to find in the domestic market. Meanwhile South Korean producers continue to order scrap from Russia. A South Korean producer has concluded a deal for Russian A3 grade scrap at $335/mt CFR. POSCO has shared bids for Japanese shredded scrap at JPY 45,500/mt ($319/mt) CFR. Considering the gap between ex-Japan shredded and H2 scrap prices at around JPY 3,000-4,000/mt, this means indications for ex-Japan H2 prices for South Korea are at JPY 38,500-39,500/mt FOB or $269-277/mt FOB.